001everybody BR call financee two 540 I'm going to ask Kate can she M take minutes as far as I can see we have all our committee members here that being said I'm going to turn the meeting over to to Mike Weaver course thanks Rich um I just wanted to really quick introduce two people mik you have to look down you know this way we're not freaking that better yes two two people I just wanted to introduce real quick uh Joan who's with us from the city she's been helping us out with uh the 2023 audit um and my replacement from my former role Angelo Walsh as well okay welcome nice to meet you we we're very lucky to have so just a look um everyone should have a a packet pred it out here also
002available electronically uh the first item on the agenda is theune uh June 24 financials the the month of uh June something um a little bit odd the expenses were higher than usual um and as you'll see in the packet that's because certain bargaining agreements allow for certain employees to receive a lump some payment at the end of the year so in one of the payrolls in June the last one some of the staff receives a l some so you'll see that the amount for the month was 26.3 Million which is typically higher than our previous averages from a year-to DAT perspective um for a budget of 1.6 million we came in at 154 .3 in expense with another $4.6 million in covered and that leaves us with a $720,000 favorable variance for the end of
003the year phally year ending June 30th 202 anybody any questions do we get to keep that I will bring it up at the next item okay also just let you know uh at the end of the year uh each school system has to file an EFS financial report and uh that has been done 2 days early than it's required so that's do great good job and that's uh and that will be audited by a separate uh accting firm we do not have to have our RSM uh order the report uh because whatever it is we're using uh do who did it last year so he's going to do it again this year I yeah I also want to thank you you know publicly for the amount of work and time I know you've been under
004tremendous amount of stress to to get the uh the audits done it's I understand the 22 audit's been completed you're working on the 23 and the reason I say that because I believe today there was an article in the paper um about the uh the uh the bond rating in danur and again mentioning the fact that the city hasn't had the the auds completed for 22 24 I guess to be submitted so we understand the stress that you're under and certainly appreciate all you're doing that I apologize I'm not the chair this we I forget um I too want to add to what Rich has said um Mike Ed welcome thank you for the time that you've both put in um and it is my goal to work closely um what I always try to
005put out um about myself is is that I ask a lot of questions because I need to understand um from my own point of view um what is going on so um one of the things that I look forward or will be looking forward uh to seeing is um reminding that I am not an accountant um nor do I have expertise or skills in finance but I am here and um under the training of K I'm attending their uh Finance series and I've learned a lot one of the things that they reminded me as a board member is to ask as many questions as you can and so that what you you'll get from me one of the things um that I would love to have us work together on is making sure that the
006financial reports are at a level that we all understand um and so when we have things like the um the initial narrative um I would love to see um a little bit more detail especially information on um what what took place that month so when I went back and looked at um the June financial report and was it June May May financial report um I I couldn't understand why some of the encumbrances um that wrot I have questions about that I hold off um to ask that um but our I think one of our goals is going going forward is we want to develop a like a three-year financial plan and so I will continue to ask questions looking toward that great thank you to pick up on on that mic um it it's important
007that the narrative speak to the statement and and we I often use the phrase with you is the kiss concept is to keep it simple um one of the things that I I would I would have liked to have seen here my question uh is going to be in the May meeting when we looked at the operational part of the budget we had a negative balance of $300,000 plus or minus and then we had the $600,000 allocation which we were all happy uring at that time that would give us a positive of 3 I think the number was 320 but it was a positive number and John Spang felt comfortable that we wind up in a black now when I'm looking at this we're looking at a favorable of 720 719 720,000 assuming we add
008the 600,000 to that so that's a million plus a million two there abouts that's a big swing and no no the 600,000 is above the lawn is the the expenses are there but the allocation for the money that we we move the budget up as well so if you look at the budget column um in the total you'll see the total budget fiscal year is 1 15, 62,000 it was difficult to break all that down into separate accounts so that's why it was added in as it says additional appropriation was added into the budget so 719 is the final 719 would be the net net correct which is 4/10 of 1% of the budget is right right so that's a nice uh a nice a nice swing in getting back to to to my point
009is a narrative to explain that favorable jump you know would be would be good uh would be good uh uh going ahead um I would I'm still on clear and terms of when you say you adjusted the budget um to the 602 I see that I normally and I missed that that point the the I would prefer to keep things as is only because as we look at the the past you know 11 months worth of statements we always had a budget of the six 150 so I I know it's footnoted but you know sometimes s it's just easy to keep it you can blame me for that yeah they keep it keep it original to do yeah one of my comments that I've had in the past is that the numbers kept changing and
010there was no fluency you know to it for consistency so that that but the 700 um is is is a good number and in terms of maybe you can elaborate as to how it became so f favorable uh in terms of what we found in the last month it wasn't that we had you know less expenses so it has to me there has to be something that affected approvals or incumbrances yeah so again we're on a cash basis so we don't have uh rules in here but I think this um your question kind of relates to the question prior um and it really is around cences so um the year-to DAT expenses are kind of the year-to DAT expenses but um as the year progresses um our purchasers put in requisitions that then become POS
011um with um with an expectation that that PO is going to be the exact amount that's going to be utilized sometimes those POs are a little over sometimes they're a little under um and in some cases um the purchase orders are are not used at all so then those purchase orders are cancelled and that you'll see that would lead to a favorable variance because you think you're going to expect it but you don't so essentially here what we're doing is in one month doing basically a cleanup of of purchase ERS that may not be completed or may not be used or yeah it's hard to tell if the the uh purchase orders that we have in the system are actually going to be utilized so we don't really cancel them out until we really have
012to at the end of the year when we Clos and that's when we'll typically say okay well this purchase order has been open for 9 months nothing's hit it you know and we haven't ordered anything so we can go ahead and close that purchase order and then that would lower your cence into more favorable areas would that be something that during the course of the year we could monitor I mean if we're issuing the purchase order uh I don't know the mechanics of who issues the purchase order but let's say might issues a purchase or for a million dollars to to buy paint to paint the buildings or something and it it's open 6 months down the road you're looking at it and there's no no expensing get it we got a favorable favorable variance
013I me at that point in some sort of a review maybe 6 months would say hey Mike is this going to be done Mike would say no I'm going to cancel it or reduce it from a mil to to 500 so that we don't get these surprises standing operat procedures is you do that maybe in January and then in March you send a note out to all the principal say okay you know here's School specialty is open what are you going to do we're going to close it so that's what you do so you give them you know January February and then in March April they you close them out okay so long as we follow some procedure like that we don't get big swings or surprises the all I want to be is on
014the track to having more meaningful statements than you in the past my complaint has been basically for the last 3 years these variants have been so screwed up that they've been meaningless so the only thing I've ever followed was a net number on the bottom is to hope that year end that at least the net number would be a positive number uh and if we do there no reflection on you guys but if we do a better job in the application of the budget any expenses toward the budget then we can have meaningful dialogues on on variances each month that's good thank you is there any other any other comments Mr I can give you a real world example of that be like we we typically have an OP for something like camera repairs this
015way if a camera goes down we can just quickly get it repaired you know and have the service call done without to go through the whole process again so we'll open a PO say for5 or $10,000 I don't know how many cameras are going to break down over the course of the year so but that that is a very common example of how sure I mean there were standard you know standard POS and stuff like that but it's okay so long as it's Mon and do Teresa I just want to point out the it wasn't screwed up it was at the request of the previous committee uh finance committee to to uh to change those figures to accommodate not seeing negative balances that type of thing it was it was there was a purpose behind
016it it wasn't screwed up okay the my next question is this is more of a political question um in the beginning of the year we collectively the administration p members went before an ad hoc committee and at that time there was a lot of hollow about the budget being 154 million should have been 154 million and then the budget of came out for the 150 million and short time after U John spank Kevin walon Went before the SOP committee and said look we're not really sure of our expenses this year and we'd like the ability to be able to draw down some reserves that we have uh up to about $3 million so it's almost a request that said if you give me sort of an opportunity to draw down if I needed it up
017to $3 million so that's sort of let people believe that expenses were going to be higher than a proposed budget that was there now returning back and going from a perception of needing $3 million or possibility of leing $ billion we we now have a very favorable balance of 700,000 so a couple of questions how did we refund this to the city did we give it back to them with stipulations or reserves to say we apply it to reserves or we just give it back cor L here it's excess Mone is number one and then how do we explain the shift from the perception I said earlier for this to more positive positive number that I'm happy that we have but I'll preface it by saying in the past couple of years at our Council
018meetings when it's budget time council members have gotten up and criticized us for not knowing what we're doing the saying that we overinflate the budgets and things like that because we always ask for a lot of money and then we never use it all and we give them back millions of dollars okay I think that's a statement but as far as I know the only time we gave back billions of dollars during Co years were justifiable but I'm I'm concerned in terms of number one the stipulation of which we give back the money and number two uh how do we we defend that that position yeah so for the for the first question um that's actually going to be addressed by at the moment under the uh number two the legislative update on how's return
019but I think it's important to know that there's distinction distinction between need and use so um the the reason that we're are favorable is because in the middle of the year when we realized that there was going to be a brunch uh have to made um certain accommodations that were restricting spending that allowed us to to come in at a at a more favorable variance at your end so you're saying that the of this is attributed to to our cost cutting controls and for example yeah we put um spending freeze in place uh mid year last year which is a little bit earlier than I think is is typically done um and in addition there were several positions that were vacated that were not back fied which also leads to salary and benefit savings all
020right I'm not going to get the course John spang's not here won's not here so I can't get into the mind of why they came up with the other the process thank you anybody else have any questions um next next item on the agenda uh yeah next uh item is number two legislative updates not accounts is going to address that for us can I give you two sorry thank you this item with uh regarding UHS accounts has been on the books for a number of years but it's always been on the books that we have that Boards of Ed would have to go to the city uh so casbo and a number of other organizations finally decided that it has changed so as of this June uh the boards ofed can have their own account
021bank account for non for lapsing funds which means you can save up to 2% of your budget in a reserve account that does not have to be does have to be asked to the city Boards of Ed set it up and that's what we're doing now Mike is already going so the Board of Ed the next meeting has to approve to set up a bank account for this non laps of funds so what's going to happen there is one in in this year's budget uh everybody thought that the high school would be opened the new high school so it was not open so they was $1.4 million in the budget right so we are now we the board of a will approve that to move it into this new uh account so that when the
022when uh it starts opening you can use it for moving expenses and so forth so that's that's a good thing and then whatever do you have 720 you would probably put some of that money into that account because you're only allowed to put up to 2% of the 150 million in that account so this has been working on for a number of years it's always been you had to go to the town the board of Finance or whatever to say okay can you take this money and so so uh it's a great U assist for Boards of vet around the state uh I thought we were going to move into well start moving in next spring that was the plan so the latest update they were concerned about that they they're no longer um promise
023in the spring it looks more like the summer so we'll have a we'll be moving in closer to the end of school during the summer and um be able to you our expenses will incur at that time the other thing in in U this 23 24 budget uh every year uh there's an i BNR which is incurred but not reported Insurance expenses every year B of Ed has a purchase order for 7 weeks 6 to S weeks of insurance expenses because we uh we do not get as bills until next year so uh we have asked the city uh which uh to put which is uh the budget it was purch order was set in in September because that's what we knew with gallager what the ibnr would be so 2.5 million uh is designated
024in the internal service fund which is designated for the risk management B of Ed self- insurance so that is your fund for 2.5 million in case your self insurance medical dental and farace pharmaceutical claims are more than anticipated so that's ibnr is done every year uh occurred but not reported because you can get somebody in in May or June for a huge claim that's going to be paid out in July August and September so that's what that money is used money is is that when is that me back up for the new account for the the the new unrestricted funding that we have um I'm sure sure we'll have a running total in the accounting of that but it it's been in the past another confusion as to what our reserves are and I remember
025last year uh going through the city and and and with Spang to Pro hars to to get them to confirm the reserve balances both that were on books and what the B of B what the administration came came up with uh and there were monies in there that that were part of um part of mone's for health insurance that set aside for that but I always thought that that money was set aside had the positive left over in other words that the positive fund balance that you had so if you had $700,000 that you posited that year you would say 500,000 would go against the Self Insurance account and if you didn't have any needs for 200,000 go go to the city so how does this other situ this one going on it's not new
026uh it's uh in the 20 2122 audit if you look at it it's the internal service fund and right now uh as as as of 2022 is $9.2 million in that fund is this just become a bookkeeping bookkeeping ENT so that a like oh so has nothing to do with actual cash that that's set aside it's just a recording of liability recording the uh recording the dollar amount that we're putting in there so okay I could understand the accounting transactions okay that's different from where if the law didn't change is 700,000 correct right correct okay two different ideas exactly we must put this into that internal service fund designated for insurance other fund is ours is is is the Board of Ed and what I would recommend you approve it next month and then uh
027Mike would give you a list of what we could use it for for next year in the area Okay so so can I just have clarify question I just want to make sure I understand the points that you all making um there's an INR account that's exists at City level correct and that is where all of the um unused uh Insurance Self insurance money has been deposited right the ibnr is deposit into that account and so if we get claims you know above your limit you can use that money above our limit meaning um we start the new year and we haven't fulfilled the claims from last year they haven't come through can we then use that money yes for those things and is there an accounting of that at our level if we would
028account for it of course okay so there's an account currently at at the city level do you know what the total is on that account now yeah the account as of the audit report of 2020 two two two right is 9.6 million so we have to wait until the city goes through its audit process for 23 before we can get an accurate number that count is right now right okay and then the city also has receed funds from us that we've returned to them for that they've been holding what we referred to as our Reserve account not this year not this year bance but in previous years okay I I wasn't here so I don't know what that is I'm sorry no that's okay I just was wondering come up so to to Kate's point
029and I was mentioning that before I think that and just to backtrack a little bit my comments early about John Spang and Kevin going before the council asking for the $3 million that $3 million was against monies somehow that we returned over a period of time that was there for us and although the sum of money was greater than three they were just saying if we go into the red you know rather than the city giving us an appropriation let us utilize our our Reserve or Kitty you weren't here you're right but I I think Mike it's something you should follow up on is to make sure there's a clear understanding on both sides as to what those numbers are cuz we don't want that I mean you're new and Dan is new and it
030was like pulling teeth to you know the it was like pulling teeth last year to finally get them to approve uh approve the number so um and this where we're all on the same page of course said the and one other thing I want to say I I do apologize because I didn't read this carefully about the the money's being put back to J that was an oversight on my part so I apologize for the for the oversight not read it too closely but so this this makes life a little bit easier Mr Jan Kate has a question sorry I just have one more other uh one question you were talking about the money that can be set aside now based on this new state edct that we can set set aside the money um
031and you referenced was it4 Million for the schools um so that was that's that's encumbered in our balance currently and we're going given that we did not use that money this year that's going to be transferred to the slot right so you can use it next year for when you open up the new high okay are any other monies that are encumbered currently that are also have not been used out of this last budget cycle of 23 just let you know just there are still outstanding bills 23 just signed bills for $40,000 in electricity we just finally got June's bill so there's a number of those couple of special ed bills so you know we're waiting for those to resolve okay and typically how long does that take well uh you would love to finish
032everything in August but it ain't happening sorry for that we just got you know when you get uh the build this week the end of last week for 40,000 for even though we incumbered the money money's incumbered that means the encumberance will go down and so forth and so we still paying 20 23 24 bill that are really okay and the money will just sit there until we get to a point where we're going to just transfer it over yeah okay thank you so can I say that this statement will be a draft and and not a final statement until we cross the without the eyes across the te right but I I would love for you and the next qu me to approve the account and to move at least 1.4 M and then
033we can wait till uh see what the other you know details yeah Rich to your point there are still sorry there there are still um as we go through the the audit for 2023 um there are still entries that are that are made bookkeeping entries um that are that are done to close out here so anything that would have a material effect you know will be reflected in the next statement and and explained U this part um to you had uh brought the fact about Kevin and John going in front of the uh City asking if we could draw down um as needed the reserve money does that still apply going forward you know I really don't know and I've asked the question that nobody has an answer to that as to whether that's an
034an open ad hoc committee situation I would have thought that at some point it would be closed and you know simplistically put from my point of view it's just to say that we didn't need it and just let it go but uh so I I don't really have an answer for you um but the status is all I know is that as I said it was it's an open ad hoc committee that that was requested I don't think we ever got an answer except that they were going to think about it and they asked John for a list of some expenses that he thought would contribute to what he was looking for in terms of that that that negative balance so I don't know really what are inspired can we find out somehow I I
035guess Mike you know I prefer the administration to do it rather than me get involved it's not my my area but I Mike can find out from Dan and what the political things are and what to do it might be necessary that they they resolve it but I would ask Michael carer to to pursue that to pursue that and if we still can have it can we slip it into that new account if we still can have it yeah the chances you're getting it like May being 62 tomorrow ain't happening I have a question for ad um in your experience and maybe even with Cara um do we generally not get um statements invoices bills until a much later date corre for instance special ed tuition the child is there on June 30th let's say
036okay and they don't give us that bill to almost August 1st I think your bus contract too is late too right utilities utilities you would think they'd be more up on the ball we also get just have been working here for years we also get odd bills that just show up that have been circulating they were sent to the wrong business they were s down the street and so sometimes they things get lost in the in the shuffle from on the billing standpoint and you'll get you know the occasional Oddball bill that shows up um but generally we get phone calls for payment but some things do come in late I got a bill that was dated 2020 no way we're paying it just you know those books are closed gone C them a note
037do you have to eat it we not 202 bill right does anybody have any committee members have any questions okay that being said was very interesting last week the week before I learned something very interesting that in committee meetings and historically at this particular point the chairperson including myself I think other chair people of the Committees who generally ask other board members but not on the committee if that had any questions and we were informed that that was a no no that the general statement should be anybody attending this particular meeting being a board member or an outsider had the had the right to ask a question so I just want to clarify that uh for the two people that are in the audience gentan there uh so it goes out to say are there
038any other questions from the public with that way regarding this particular presentation I think we have oh do we Okay number three is uh listed on the agenda is Student Activity account update training and guide that is also F this yes and trat thank you thank you oh than so we've been working on uh updating and uh helping the principes and the secretaries of what Student Activities are what is needed to be sent to their business office and so forth so we met with all of the elementary secretaries and principles we met with all the middle school secretaries and principles the high school principal we didn't meet with we met with the bookkeeper who's excellent and we met with her alone to go over these items so in in your packet it's two different almost
039similar things that we've discussing one is a manual for the principles and so forth we still have to do update a little bit the second one is sub activities bookkeeper what they have to send to uh Angela who will be watching out on the uh uh all of the items and Angela has experience in U in Student Activities and again Student Activities is for students so through Richard those Rich if I could just say a word sure about this um thank you um you know one of the and you'll see it in the board goals in another presentation but one of the things that was very quickly uh needed um in the spring that we realized we to put in some Control Systems you know we've had an incident um around Student Activity um and
040so in terms of financial controls that's going to be part of the goals moving forward is that that we have manuals that exist things that are written down um you know we we've had folks that have worked here for a long time and so when folk when they do leave they take a lot of institutional knowledge with them and so it's imperative that we that we write down the kind of Rules of Engagement and procedures so that not only does it serve as as training but it also serves as guide for for our processes and your policies so um I I I didn't mean to interrupt you but I just wanted to kind of make the connection about the kind of the work towards cleaning up some just procedural things that needed to happen and
041um and and you know did a phenomenal job of facilitating um that work behind this and getting that on track so I'm sorry to interrupt no that's okay and we just have we're going to update it because I have a couple of questions uh about U uh gifts and and uh gift cards and reimbursements and it's all in here we may update the numbers but uh uh everybody all the principles secretaries have seen it we've gone through it uh they really uh like it we there was one uh secretary who was in the middle school she went to the elementary school Jen uh who uh did a lot of work on the cell pH we we CED out that she had which were great so uh uh I think this will help uh Angela knows
042about it she's great at uh Student Activities uh so uh get the bank statements copy the bank statements uh through everything that should be go through with and there's a number of items as you go through it uh that have to be sent in and attached and so forth so uh a better way of dealing with this and it was you know uh it's just updating uh what was what was in the past so uh which is great so how many how many bank accounts we have I'm sure inclusive of of these accounts uh I would say probably 40 or 45 really several yeah each each school has a Student Activity account um the board of education has five accounts with they operating between School Lun Services Grants and then the operating and payroll accounts
043for general f and then in addition there also in with those Student Activity accounts you know they're not technically Student Activity accounts are bank accounts uh in usually in the high school for various scholarships and things of that nature what about money you get for like BRS is that over and above that or is that included that's in one of the five account teally own by the by the city so the r fund has its own bank and obviously require Bank reconciliations this so it's fair to say that at the end of any audit period one of the check boxes you do is Bank reconciliations are completed correct in Prior I think they were being done on an annual basis to satisfy that requirement um moving forward starting in fiscal year 23 we're having them
044done by month yeah which is good okay thank you very much thank you L anybody else have any questions I would just like to uh say Ed and Mike and to the superintendent uh these two documents um is Well written that we needed it yes because you know people have gotten slacked in their do I slacked was just updating things uh understanding certain things you know I mean so if you've done it in the past they continue to do it so this just says oh maybe we should do it this way instead of that way so it's just and I appla you we doing this this way and and we I know we are a few in numers uh as far as trying to read through this but when you have a minute and 2:30
045at night when you wait you know get it and read it when you have some time and very good and our I'll be our finance team I I really like to app the new ladies I've never met you before but I welcome you to our team my last suggestion is and I hope that Ed and Mike and the superintendent will or the superintendent will call a meeting with the mayor it's September sit down and start explaining to them the procedure that we going into for the budget so we won't be down to City Hall every year saying we need this and what I learned over the workshop is and we have never said this as long as I have been on the the board we always said this the superintendent budget once that budget is
046finalized it's the board's budget okay so now we can stop saying that it's not just the superintendent everybody said well superintendent put this together on behalf of the board no at a workshop you learned is the board budget once the superintendent has completed and shifted over to us so I hope that we can meet with the mayor and and his committee and the finance team and the superintendent will start working with the men and his team so we won't go into the holidays coming up and January and everybody you know at the same point we were last year thank you thank you and just final thought one of the things that I'd like to accomplish is that the comments I going say criticism that be made are to the end so that the financial statements
047are easier to understand and Brad not for me to dominate the conversation because I have a little bit more of an accounting background than maybe some of the other people but that the actual Layman could understand it and I think that creates more interest and more conversation into the statements so uh we get more uh sort of a bank from Dollar so again I keep it on a kiss keep a simple stupid concept um if we could just in the future try to to to know the audience that that we're we're dealing with that's good but I thank you again for everything that you have done uh and continue to do uh we're we're moving ahead it's in the right direction and and uh I'm personally very happy at this point then I'll ask if
048there any other comments by any any anybody in the audience goad okay I have one question and it's just maybe for clarity with the new account is there any expiration um once those funds come to us are there any restrictions or Explorations we can use the you just you just should know what are you going to use and you can always change that use with the void you know let's say you want to uh buy 50 cameras all a sudden you don't need 50 c you only need 25 and the board would say okay we only use 25 and the rest of the money should be used for something else it should be designated thank you but it's a moving yeah we have moving designation right because you never know you know exactly something occurs
049that we didn't realize thank you um that being said I like to take a motion to a chair second by second Teresa thank you all in favor I meeting a